Study finds prices increased moderately in B.C. as a result of HST

An independent study of the consumer impacts resulting from the HST in British Columbia has found that it has increased prices moderately, or by $1 for every $165 of spending.

The study, made public Thursday, was done for the Business Council of British Columbia by Jonathan R. Kesselman, Canada Research Chair in Public Finance at Simon Fraser University’s School of Public Policy.

“The HST is not a ‘tax grab’ and … its overall impact on the prices including taxes paid by consumers is very modest,” Mr. Kesselman said in a statement.

Using Statistics Canada’s monthly survey of B.C. prices through December, 2010, the study found the HST has resulted in a 0.6 of 1% increase in the B.C. consumer price index.

A reason for the small impact is that the HST replaced the province’s former Retail Sales Tax (RST) and the federal Goods and Services Tax (GST), with no change in the total tax rate for most components of consumer expenditures, while only 17% of total consumer spending in B.C. became newly taxable under the HST, the study found.